Halal logo from various parts of the world / Ruzanna Muhammad-Zuknik
While businesses want to access the high-growth halal food segment, what does the process involve for certification and how do the benefits compare to the costs?
|YOUR PAIN POINTS ADDRESSED||ASK YOURSELF|
|You are a multinational company contemplating securing halal certification|
Is halal certification worth it?
|How large is the global food certification market and who are its major players?|
|What does halal certification involve?|
|What are the benefits and is it worth it overall?|
GLOBAL FOOD CERTIFICATION
The market for food certification was valued at $10.7 billion in 2013 and it is projected to grow to $14.5 billion by 2019, driven by a CAGR of 5.2 percent from 2013 to 2019, according to research firm Markets and Markets. Developed countries account for more than 95 percent of the share of the food certification market.
Some of the prominent players accounting for the majority of market share at present are Bureau Veritas (France), Dekra SE (Germany), DNV GL (Norway), Intertek Group PLC (United Kingdom), SGS SA (Switzerland), TUV SUD AG (Germany), and TUV NORD.
There are numerous food safety certifications globally but the most prominent and well-known ones include ISO 22000 (Food Safety Management System), HACCP (Hazard Analysis and Critical Control Points) and the FSSC 22000 (Food Safety System Certification).
HALAL CERTIFICATION PROCESS
The halal food sector is estimated at over $800 billion in 2015, according to a recent Salaam Gateway Report on halal food regulation. It is a complex web, with over 300 certification bodies globally.
For companies seeking to address the lucrative opportunities offered by the halal food sector, securing certification is a very necessary and ongoing process.
There are several key considerations in entering this market.
Products, not companies, are certified as halal
Halal certification, unlike other leading types of food safety certifications, including ISO 22000 and FSSC 22000, is a product certification, meaning that each and every product needs to be separately certified. There can be no company-level certification.
For the product to be halal, each and every ingredient, processing aid and packaging component as well as any units that process the product itself need to comply to halal standards.
There are multiple halal standards and no common standard globally, hence the certification process varies. But halal certification is typically valid for only one year, as certifiers seek to maintain oversight on the quality of certified products.
All inputs must be halal and traceable on an ongoing basis
The biggest challenge for companies to ongoing compliance with halal will be with the sourcing of materials from the supplier, and ensuring the traceability of their product including ingredients, processing aid and packaging material. All the materials used in the production of a product, whether directly or indirectly, need to be compliant.
Hence, the onus is on the procurement team to ensure that all raw materials being purchased are accompanied with a halal certificate or declaration. Complications can arise, in particular, through cross-contamination where halal and non-halal products may not be adequately separated in production or processing facilities.
Discussing the need to maintain halal integrity in the supply chain, Saqib Mohammed, CEO of Halal Food Authority in the UK told Salaam Gateway, “To address segregation and risk of contamination, we have extended our ‘no-pork’ policy to also include raw materials of products to prevent the introduction of porcine DNA from the intake to dispatch. From the outset, it seems challenging at present; nevertheless this is likely to be a sustainable solution for exporting companies going forward."
Halal technical personnel need to be part of the team
Employing personnel with halal operations and procurement experience is vital, and this is also increasingly a requirement by leading certification bodies.
The Emirates Authority for Standardization and Metrology (ESMA) UAE National Halal Mark Guidelines stipulate that halal operations must be overseen by managers with halal technical experience who are involved with the halal process.
The Malaysian Halal Standard MS1500 has strict requirements for personnel, requiring a minimum of four halal-competent personnel in multinational corporations, and a minimum of two halal personnel in Small- and Medium-sized enterprises (SMEs).
The cost of certification varies significantly
To give a sense of the different price points: the cost for halal certification for 10 products will be approximately $600 per year from India’s Jamiat Halal Trust, according to its fee schedule, and $2,000 by Halal Committee, another India-based halal certification body.
However, for the same 10 products it will cost around $8,000 to be certified, as per the UAE.S 2055-1, by an accredited certification body.
Since this is a product-based certification the cost depends on the number of the products being manufactured at the particular unit. However, it also depends on a number of other factors including the country of origin, auditing fees, accreditation, demand or brand value.
BENEFITS OF HALAL CERTIFICATION FOR COMPANIES
There are two core reasons why a company should seek halal certification for their products.
Accessing the lucrative OIC markets
The 57-member country Organisation for Islamic Cooperation (OIC) is highly lucrative, importing on aggregate $16 billion worth of meat and live animals in 2015, according to ITC Trademap.
The benefit is heard consistently from the industry, with David Ventura, Sales Director at Spain-based flavors and fragrances firm Grupo Carinsa, commenting at Alimentaria 2016, where Salaam Gateway was also present, “The OIC markets have been an important part of our growth story – getting halal certification helped us expand into 30 markets.”
Discussing how certification for UK-based businesses helps access the global market, HFA’s Saqib Mohammed said, “The certificate provided by us is recognized by the Malaysian, Indonesian and Singaporean authorities. This allows our client easy access to these markets as halal certification is mandatory for most of the food products to be exported to these countries. Also our certified meat-based products, exported to the Middle East, enter the market relatively easily.”
Appealing to the ever-stringent, and ever-demanding halal consumer
In Muslim-majority countries, particularly in South Asia and the GCC – it is naturally assumed that all food is halal by virtue of their large Muslim populations. However, increasingly, the discerning consumer is expecting proper certification, and hence halal certification is becoming an important marketing tool.
Dr. Hassan Bayrakadar, Managing Director of RAQAM Consultancy, a prominent firm based in Dubai, commented to Salaam Gateway, “All the food products available in the local GCC market is halal as it is highly controlled by the authorities. Hence the halal logo present on the food products is mainly to attract consumers rather than part of compliance.”
Niaz Farooqui, Chairman of India’s Jamiat Ulama, Halal Hind Trust, corroborated this to Salaam Gateway, “The demand and popularity of halal certification is going up but since the awareness regarding halal is low among the clients, it takes much longer time for industries to get certified. However once certified, it is worth the wait since our certified companies can have global reach with our certificate."
Study your local market: Who are the leading certifiers and which export markets will they give you access to?
Determine the adjustments: Conduct a feasibility study to see whether your existing processes and sites can accommodate a halal process or if you need a new location.
Identify the right talent: Determine what resources you need, per the key export markets you are targeting, and develop a hiring strategy.
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